Military Technology Restrictions Hang Up Motorola In China

Jan 13, 2005

U.S. restrictions on militarily useful technology are threatening plans by Motorola Inc. to commission a $2.5 billion semiconductor wafer plant at Tianjin, northeastern China. An executive at the facility explains that the problem arises from China's reluctance to buy the 0.35 micron wafers planned for production because these are no longer state-of-the-art. Instead the Chinese want 0.18 micron wafers. China needs these for an ever more sophisticated range of telecommunications and Internet equipment. But 0.18 wafers fall within a category of high-tech products that require special permission from the U.S. Dept. of Commerce for export to so-called "Tier Three" countries, with which Washington has a particularly sensitive strategic relationship. China falls into this group. "Motorola wants to make the wafers here, but the U.S. authorities are delaying a go-ahead," said Li Yong, chairman of the industrial zone in Tianjin where Motorola's operations are located. The Chinese official added: "Motorola is a very good foreign investor in our view. But we are not happy with the American government's attitude." According to some experts, 0.18 micron wafers could be used in Chinese military supercomputers, which is something the U.S. government wouldn't support.